Inventory Has a Cost of $475 000 and a Current

question 40

Multiple Choice

Inventory has a cost of $475 000 and a current selling price of $435 000.What amount should be reported on the financial statements and what concept or principle applies?

• A)$435 000,conservatism
• B)$435 000,going concern
• C)$475 000,going concern
• D)$475 000,cost

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Definitions:

Average Costs

The total cost of production divided by the total quantity produced, often used to determine profitability at various levels of output.

Product Costs

Product costs are the costs directly associated with the production of goods, including direct materials, direct labor, and manufacturing overhead.

Financial Reporting

The process of disclosing financial information and statements by businesses to shareholders and the public.

Variable Cost

Charges that adjust in line with the production levels or the quantity of sales.